What are the requirements for the 'Designated Manager' of an Aplus franchise if the franchisee operates under a business entity?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee operate under any approved form of business entity, unless we agree otherwise, the Designated Manager must be the 51% owner of the voting stock or other ownership interest in the entity.
"Designated Service Provider" has the meaning given to such term in Section 14.1.
"Designated Specific Suppliers" has the meaning given to such term in Section 13.1.
"Effective Date" means the date on which Franchisor and Franchisee fully execute this Agreement, thereby
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a franchisee operates the Aplus store under a business entity, the Designated Manager must typically own at least 51% of the voting stock or other ownership interest in the entity, unless Aplus agrees otherwise. The Designated Manager is the individual with primary responsibility for managing the day-to-day operations of the franchised business.
This requirement ensures that the person in charge of the Aplus store has a significant stake in the business. This arrangement aligns the manager's interests with the overall success of the franchise. It also gives Aplus some assurance that the Designated Manager is fully committed to the business and will be motivated to adhere to Aplus's standards and procedures.
For a prospective franchisee, this means that if you plan to operate your Aplus franchise through a corporation, LLC, or other business entity, you will need to ensure that your Designated Manager meets this ownership requirement. If you wish to have a Designated Manager who does not meet this criterion, you would need to seek explicit approval from Aplus. This could impact your business structure and management decisions, so it's crucial to understand this requirement before finalizing your franchise agreement.